FTX Update: This User withdrew MILLIONS from FTX, and SBF to Prison?

There is a lot of speculation around FTX and what happened with the company. People fear that their investments went to bust, while others find loopholes to withdraw millions. Did the CEO of Binance CZ really plan this attack? Or was it pure mismanagement from the CEO of FTX Sam Bankman-Fried (SBF)? Will SBF go to prison? What will happen to FTX in the future? Let’s try to answer as many questions as possible given the current situation and news of today.

What Happened to FTX?

Sam was notorious for buying failed cryptocurrency businesses. He took this action to safeguard the crypto community. Sam comes to the rescue and offers his helpful hand each time a well-known and significant crypto firm declares bankruptcy.

On your financial sheet, having a lot of failed enterprises is not a good thing. FTX appears to have a large number of illiquid businesses, which negatively impacts the company’s cash flow. A big losing investment was Alameda research.

News about stolen internal files that FTX supplied to Alameda research broke. Due to the intimate ties between FTX and Alameda, this revelation was explosive. Bankman-Fried established both, and there has been a lot of concern regarding the scope and character of their fraternal relationships.

Why did Alameda lose a lot of money?

What is Alameda?

Alameda is a Quant company. A Quant fund is a type of hedge fund that makes investment choices and executes trades using automated programs, mathematical analysis, and statistical models rather than fundamental research and human discretion.

Why was Alameda bad?

Apparently, Alameda was not quite successful as it invested in losing businesses such as Celsius and Voyager….not good for the business at all. Instead of relying on purely technical decisions, Alameda was after fundamental and emotional decisions that were ordered by SBF, and also by other…inexperienced key people.

Inexperienced people ran Alameda

News surfaced that the CEO of Alameda was a 28-year-old girl who barely had any solid experience. Her name is Caroline Ellison, an ex-Credit Suisse employee who quit in pursuit of her next career bump. Being close to SBF, she gained her position and became Alameda CEO.

Ellison confessed that most of the decisions made by her were forced on her by SBF. She also said that she was basically “winging” most business decisions.

Will SBF go to Jail?

When companies go bankrupt, it is normal to open a lot of investigations. It can last months and even years to find the truth. If SBF is truthful about everything he is saying, he shouldn’t disappear or run away. However, the truth lies against SBF.

SBF tweeted several times before the collapse of FTX that the company does not invest the money of its depositors. First lie, as it has been proven that FTX did in fact fund Alameda.

Other lies include that the company is doing fine, and is even expanding and helping out other businesses such as Voyager. Well, Elon Musk went on a bad road with the SEC as he once tweeted that he wanted to take Tesla private. This gave false information to investors. SBF definitely did the same when he eluded that the company was doing okay. Those lies along with playing with depositors’ money can definitely lead SBF to jail, most probably for a long time.

How to Withdraw from FTX?

On their official website, FTX announced that they stopped onboarding new clients. However, withdrawals are basically blocked. The company started to process withdrawals by priority following the below:

• Bahamian users: because the company is registered under Bahamian laws, they are forced to prioritize Bahamian users first.
• Holders of TRON tokens: Holders of TRX, BTT, JST, SUN, and HT can trade assets from FTX 1:1 to external wallets thanks to a unique facility that was established under an agreement between FTX and the Tron foundation. On November 10, 2022, at 18:30 UTC, this capability will be available.

How did a user manage to withdraw Millions from FTX?

A Twitter user called AlgodTrading knew about the Bahamian laws that require FTX to process the first withdrawals of Bahamian registered accounts. When he knew this, he first reached out to internal workers over at FTX and bribed them to make his account a “Bahamian” user. He basically offered around USD 100,000 to do so, and it seems that his trick worked.

Next, he started buying FTX funds from other users for 10 cents on the dollar. He did that through tweeting, and opening a Telegram group, asking users to fill out a form, and reaching out personally to buy their accounts. The next step would be to start withdrawing. However, other news surfaced that people are already removing their money from FTX balances by purchasing NFTs from Bahamian accounts for six and seven-figure sums; the buyer receives a side payment in return. AlgodTrading did refute all those “Fake news”.